Formidable Company Collected the Following Information: Standard Costs Per Unit

question 10

Multiple Choice

Formidable Company collected the following information: Standard costs per unit:
Variable overhead 4 machine hours @ $6 per machine hour
Fixed overhead 4 machine hours @ $10 per machine hour
Actual output 20,000 units
Denominator (normal capacity) output 21,000 units
Actual machine hours 79,000 machine hours
Actual variable overhead cost $540,000
Actual fixed overhead cost $800,000
Using the three variance method, what is the budget variance?

• A) $24,000 (U)
• B) $24,000 (F)
• C) $6,000 (U)
• D) $6,000 (F)

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Definitions:

New Product

An item that is introduced in the market for the first time or a significantly improved or modified version of an existing product.

Large-scale Success

Significant achievement, often by a company or individual, that typically has widespread recognition or impact.

Entrepreneurial Success

The achievement of desired business outcomes by an entrepreneur, often characterized by business growth, profitability, and sustainable competitive advantage.

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A qualification awarded to students upon successful completion of a course of study in higher education, usually signifying an advanced level of knowledge in a particular field.